Question

Assignment Question(s):                                                      

Q1-

A company wants to implement good internal control. What are the policies and procedures you can suggest to minimize human frauds and errors? (1Mark)

Q2-

Assume that you have a company. And the management team estimates that 3% of sales will be uncollectible.

Give any amount of sales and prepare the journal entry using the percent of sales method. (1Mark)

Q3-

A company that uses a perpetual inventory system made the following cash purchases and sales. There was no beginning inventory.

January 1:	Purchased 30 units at SAR11 per unit
February 5:	Purchased 30 units at SAR 13 per unit
March 16:	Sold 50 Units for SAR 15 per unit

A. Prepare general journal entries to record the March 16 sale using the

1. FIFO inventory valuation method.
2. LIFO inventory valuation method.
3. Weighted average valuation method.

B. What is the cost of goods sold and the gross margin for each method? (2Marks)

Q4. What is the bank reconciliation? why is it important for companies to prepare bank reconciliation periodically? (1Mark)

please not the answer should be unique answer not similar to any answer

Answer 1

1) Policies and procedure to minimize policy and procedure

a. Systematic accounting system or cloud based accounting package in line with company's process

b. Clearly defined policy for each and every process with DOA and control matrix

c. Sound interal audit system

d. Implement accounting policy manual and system automatic controls

2. Journal entries for sales & collection

Debtors account debit $100

To Sales $100

Cash account debit $97

Bad debts accounts debit $3

To Debtors $100

3.A FIFO Method/LIFO/Weighted average

Cash account debit 750

To sales account 750

Sales entries will be same in all 3 cases as stock entries not asked

3B.Profit and gross margin for each products

Particulars	FIFO	Working	LIFO	Working	Wighted average	Working
Sales	750	50 units at SAR 15	750	50 units at SAR 15	750	50 units at SAR 15
Cost of goods sold	590	30 units at SAR 11 and 20 units at SAR 13	610	30 units at SAR 13 and 20 units at SAR 11	600	Average stock rate 12( 30*11+30*13/60)
Gross profit	160		140		150

4. Bank reconciliation refers to reconcile bank balance as per bank with bank balance as per books of accounts as sometimes certain transaction not entered in any one of the system.

Importance

Help in identifying fraud & error

Help in administrative ease